State Tax Commission of Missouri
STANLEY & KATHLEEN PLATTS,)
v.) Appeal No.07-12721
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.Hearing Officer finds presumption of correct assessment not rebutted by Complainant’s evidence, but rebutted by Respondent’s evidence. True value in money for the subject property for tax years 2007 and 2008 is set at $490,000, residential assessed value of $93,100.
Complainant, Stanley Platts, appeared pro se.
Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $507,500, assessed value of $96,420, as residential property.The Board reduced the value to $479,400, assessed value of $91,090.Complainants proposed a value of $416,300, assessed value of $79,100, in their Complaint for Review of Assessment.A hearing was conducted on July 8, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Mr. Platts testified on behalf of Complaints.He gave the owners’ opinion of value to be $338,200.The opinion of value was determined by taking the square feet of living area of the subject (3,560) times $95.00.The $95 figure was derived from the sale of a neighboring property (3926 Bouquet Road) that sold in 2008 for $475,000 or $95 per square foot of living area.
Complainant offered into evidence as Exhibit A, a copy of the real estate listing sheet on the property at3926 Bouquet Road.Counsel for Respondent objected to Exhibit A on the grounds of lack of Foundation, Relevancy and Hearsay.Objection was sustained and Exhibit A was excluded from evidence.The Exhibit is maintained in the file, but is not a part of the evidentiary record in the appeal.
Respondent placed into evidence the testimony of Mr. Arthur Froeckmann, Missouri State Certified Residential Real Estate Appraiser for St. LouisCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Froeckmann was received into evidence.Mr. Froeckmann arrived at an opinion of value for the subject property of $490,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of four properties deemed comparable to the subject property.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.The subject property is located at 3927 Bouquet Road, Wildwood, Missouri.The property is identified by locator number 26Y410153.The property consists of 3.48 acres improved by a one and a half-story brick and vinyl, single-family structure of good quality construction.The house was built in 1997 and appears to be in average condition.The residence has a total of eight rooms, which include four bedrooms, two full and a half-bath, and contains 3,560 square feet of living area.There is a full unfinished basement and an attached three-car garage and a detached three-car garage. Exhibit 1.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007, to be $416,300, as proposed in the Complaint or $338,200 as testified to at hearing.
5.The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The four properties were located within the subject’s neighborhood.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. Exhibit 1.
6.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from -6.2% to 4.5%.The adjusted sales prices for the comparables calculated to $501,800, $484,500, $487,500 and $492,700, respectively.The appraiser concluded on a $490,000 value which calculated to a value per square foot of $137.65 compared with the sales prices per square foot of living area for the comparables of $156.56, $155.04, $127.73 and $159.43. Exhibit 1.
7.Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2007, to be $490,000.Exhibit 1.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.Section 138.431.4, RSMo.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Complainants failed to rebut the presumption of correct assessment.Respondent’s appraiser presented substantial and persuasive evidence in the form of the appraisal of Mr. Froeckmann to rebut the resumption of correct assessment and establish the fair market value of the property under appeal.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).It is the fair market value of the subject property on the valuation date.Hermel, supra.
Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit 1.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
The methodology employed by Mr. Platts of multiplying the living area by a figure derived form the sale of a single neighboring property is a technique for appraisal of property for ad valorem tax purposes that the Commission recognizes.It has never been accepted by any court in this state.A single sale of a property does not establish the market value for another property.
Mr. Froeckmann employed the well recognized and generally accepted approach to value utilized when valuing owner occupied homes – the sales comparison approach.In most instances, given adequate sales data, this is the superior method for valuing a property such as the subject of this appeal.
Complainants Fail To Meet Burden of Proof
In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
The owner of property is generally held competent to testify to its reasonable market value.Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo.App. E.D., 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.” Carmel Energy at 783.
The testimony of Mr. Platts established that his opinion of value was based upon a single sale of a property and his calculation of a per square foot of living area sale price.This is not a proper foundation for an opinion of value.It does not contain the proper elements of comparison to three or more sales of properties which have been properly adjusted to account for differences between the sale properties and the property being appraised.In short, it is not an appraisal of property to multiply the unadjusted per square foot sale price of a single property times the living area of the property being valued.Therefore, the opinion of value tendered by Mr. Platts has no probative weight.The opinion of value is rejected since the basis for it has insufficient support for a proper approach to valuing real property.
Respondent Proves Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.Hermel, Cupples-Hesse, Brooks, supra.The appraisal developed by Mr. Froeckmann met the required standard to establish the fair market value of the subject as of January 1, 2007 to be $490,000.Accordingly, the value set by the Board was rebutted.
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2007 and 2008 is set at $93,100.
Complainants may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED August 4, 2008.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 4th day of August, 2008, to:Stanley Platts,3927 Bouquet Road,Pacific,MO63069, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector,CountyGovernmentCenter,41 South Central Avenue,Clayton,MO63105.
W. B. Tichenor
Senior Hearing Officer